The British small business landlord said it was cutting costs and capital expenditure to mitigate the impact of a much lower cash rental income in the short term.

Only half of Workspace Group Plc’s customers paid their rents at the end of March and a large number of them have sought relief, the company said on Tuesday, while underlining it has significant capital to ride out the coronavirus lockdowns.

The British small business landlord said it was cutting costs and capital expenditure to mitigate the impact of a much Lower Cash Rental income in the short term.

To date, it had received about 50% of rents due at March end in cash and had seen a slowdown in inquiries and lettings activity at the end of the month, Workspace said.

The London-based company’s shares were down 0.7% at 675 pence in contrast to the broader market that was rallying on early signs of the coronavirus crisis easing.

The company, however, said its finances were solid enough, with 70 million pounds in cash, 96 million pounds in undrawn credit facilities and no material debt maturities until June 2022.

Workspace said it could withstand a reduction in net rental income of 61% or a fall in asset valuation of 63% before any debt covenants are breached.

“We recognise that our continued success depends on the ability of customers to emerge from the coronavirus pandemic in good financial shape, and we are working with them to achieve this,” Chief Executive Officer Graham Clemett said.

The company expects trading profit for the year ended March 31 to be in line with market expectations, mainly due to strong lettings activity in January and February.

Workspace said it could not provide financial guidance in the short term due to the uncertainty caused by the health crisis and also held back from recommending a final dividend for the year.

Source: Reuters

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